Oil giants awash with cash; billions spent in share buyback programs: Chevron $US15bn over three years, Exxon $US16bn in six months, BP $15.5bn in a year

According to Ed Crooks in London, Chevron, the second largest US oil company, was to spend $US15 billion ($17.1 billion) on its own shares within the next three years, extending a $US5 billion a year program that began in 2005, reported The Australian (28/9/2007, p. 29).

The burdens of wealth: The move reflected big oil com­panies’ difficulties in finding uses for their large cash flows, boosted by high oil prices, Crooks said. Some of Chevron’s rivals among the big five international oil companies had been returning even larger sums to shareholders. Chevron’s buybacks were dwar­fed by Exxon Mobil’s and BP’s.

Giants buy back substantial holdings: In the first half of 2007, Exxon’s gross share purchases were worth $US16 billion, reducing the shares outstanding by 3.2 per cent. In 2006 it spent $US29.6 billion. BP, which had a market capita­lisation roughly in line with Chevron at about $US220 billion, was the next heaviest spender. It bought back $US15.5 billion worth of shares last year. Euro­pean rival Royal Dutch Shell was more modest, buying back $US8.2 billion worth of shares. There had been signs that both Shell and BP had been reducing their repurchasing this year. BP’s buybacks for the year to date had been worth about $US5.9 billion and Shell’s were just $US1.4 billion in the first half.